The Relationship Between the GATT and TBT Non-Discrimination Obligations

From the EU response to the Seal Products panel's first set of questions:

Question 7
(All parties) Please explain your views on the relationship between the TBT Agreement
and the GATT 1994 in terms of the non-discrimination obligations and policy
justifications addressed in both agreements. For example, can a measure found
inconsistent with Article 2.1 and/or Article 2.2 of the TBT Agreement be justified under
Article XX of the GATT 1994? Or, vice versa (i.e. can a measure found unjustifiable under
Article XX of the GATT 1994 be found consistent with Article 2.1 and/or Article 2.2 of the
TBT Agreement)?

16. The European Union considers that the TBT Agreement and the GATT 1994 must
be read together in a consistent manner. The TBT Agreement "further[s] the
objectives of GATT 1994".9
In this sense, the non-discrimination obligations and
policy justifications addressed in both agreements should be interpreted harmoniously. In the European Union's view, an interpretation of Articles 2.1 and
2.2 of the TBT Agreement that would provide for a different outcome in terms of
the consistency of the measure at issue with the GATT 1994 would be illogical.

17. With respect to the non-discrimination obligations, both Article 2.1 of the TBT
Agreement and Article III:4 of the GATT 1994 have been read together by the
Appellate Body when interpreting the terms "less favourable treatment".10 The
same should be concluded with respect to Article 2.1 of the TBT Agreement and
Article I:1 of the GATT 1994.11 The same legitimate regulatory distinctions
should be capable of showing that there is no discrimination regardless of whether
the measures are examined under Article 2.1 of the TBT Agreement or under
Articles I:1 or III:4 of the GATT 1994; otherwise, a public policy deemed
legitimate pursuant to Article 2.1 of the TBT Agreement would fail to save a
measure under GATT 1994 unless such public policy falls within Article XX's
limited list of exceptions. Indeed, if both the GATT 1994 and the TBT Agreement
are intended to strike a balance between trade liberalisation and regulatory
autonomy, then it makes little (if any) sense for technical regulations to enjoy a
much broader scope of policy space than all other types of internal regulations.
Further, it would make no sense whatsoever to conclude that Articles I:1 and III:4
of the GATT 1994 prohibit what is consistent under Article 2.1 of the TBT
Agreement, as this would make Article 2.1 of the TBT Agreement and the
balanced interpretation of that provision carefully developed by the Appellate
Body utterly useless. Given that the GATT 1994 also applies to all technical
regulations, complainants would have an incentive to bring claims only under the
GATT 1994, thereby limiting the possibilities of justifying regulatory distinctions
to those grounds contained in the closed list in Article XX. Indeed, this is precisely
the situation in this dispute. Norway has carefully avoided to argue its claim under
Article 2.1 of the TBT Agreement (even though it is in its Panel Request) because,
apparently, it believes that it cannot show that the measure is inconsistent with that
provision, while claiming that it is inconsistent with Articles I:1 and III:4 of the
GATT 1994.

18. Thus, the European Union considers that the contours of the basic nondiscrimination obligations in the TBT Agreement and the GATT 1994 should be
understood as similarly crafted: both recognise a regulatory space in case of
alleged de facto discrimination claims, in the sense that both permit a regulation
that may result in detrimental impact in so far as the regulatory distinction causing
such an impact is legitimate and does not reflect discrimination.

In terms of the justifications provided by Article XX of the GATT 1994 and
Article 2.2 of the TBT Agreement, the European Union also considers that they
should be read harmoniously, thereby providing for the same consistent results.

That's a great question by the panel. I agree with the general principle articulated in the EU response; developing interpretations of all of the various provisions so that you get "consistent results" may be tricky, though.

Comments

The Relationship Between the GATT and TBT Non-Discrimination Obligations

From the EU response to the Seal Products panel's first set of questions:

Question 7
(All parties) Please explain your views on the relationship between the TBT Agreement
and the GATT 1994 in terms of the non-discrimination obligations and policy
justifications addressed in both agreements. For example, can a measure found
inconsistent with Article 2.1 and/or Article 2.2 of the TBT Agreement be justified under
Article XX of the GATT 1994? Or, vice versa (i.e. can a measure found unjustifiable under
Article XX of the GATT 1994 be found consistent with Article 2.1 and/or Article 2.2 of the
TBT Agreement)?

16. The European Union considers that the TBT Agreement and the GATT 1994 must
be read together in a consistent manner. The TBT Agreement "further[s] the
objectives of GATT 1994".9
In this sense, the non-discrimination obligations and
policy justifications addressed in both agreements should be interpreted harmoniously. In the European Union's view, an interpretation of Articles 2.1 and
2.2 of the TBT Agreement that would provide for a different outcome in terms of
the consistency of the measure at issue with the GATT 1994 would be illogical.

17. With respect to the non-discrimination obligations, both Article 2.1 of the TBT
Agreement and Article III:4 of the GATT 1994 have been read together by the
Appellate Body when interpreting the terms "less favourable treatment".10 The
same should be concluded with respect to Article 2.1 of the TBT Agreement and
Article I:1 of the GATT 1994.11 The same legitimate regulatory distinctions
should be capable of showing that there is no discrimination regardless of whether
the measures are examined under Article 2.1 of the TBT Agreement or under
Articles I:1 or III:4 of the GATT 1994; otherwise, a public policy deemed
legitimate pursuant to Article 2.1 of the TBT Agreement would fail to save a
measure under GATT 1994 unless such public policy falls within Article XX's
limited list of exceptions. Indeed, if both the GATT 1994 and the TBT Agreement
are intended to strike a balance between trade liberalisation and regulatory
autonomy, then it makes little (if any) sense for technical regulations to enjoy a
much broader scope of policy space than all other types of internal regulations.
Further, it would make no sense whatsoever to conclude that Articles I:1 and III:4
of the GATT 1994 prohibit what is consistent under Article 2.1 of the TBT
Agreement, as this would make Article 2.1 of the TBT Agreement and the
balanced interpretation of that provision carefully developed by the Appellate
Body utterly useless. Given that the GATT 1994 also applies to all technical
regulations, complainants would have an incentive to bring claims only under the
GATT 1994, thereby limiting the possibilities of justifying regulatory distinctions
to those grounds contained in the closed list in Article XX. Indeed, this is precisely
the situation in this dispute. Norway has carefully avoided to argue its claim under
Article 2.1 of the TBT Agreement (even though it is in its Panel Request) because,
apparently, it believes that it cannot show that the measure is inconsistent with that
provision, while claiming that it is inconsistent with Articles I:1 and III:4 of the
GATT 1994.

18. Thus, the European Union considers that the contours of the basic nondiscrimination obligations in the TBT Agreement and the GATT 1994 should be
understood as similarly crafted: both recognise a regulatory space in case of
alleged de facto discrimination claims, in the sense that both permit a regulation
that may result in detrimental impact in so far as the regulatory distinction causing
such an impact is legitimate and does not reflect discrimination.

In terms of the justifications provided by Article XX of the GATT 1994 and
Article 2.2 of the TBT Agreement, the European Union also considers that they
should be read harmoniously, thereby providing for the same consistent results.

That's a great question by the panel. I agree with the general principle articulated in the EU response; developing interpretations of all of the various provisions so that you get "consistent results" may be tricky, though.